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NZDJPY breaks 200-day SMA; downward movement imminent?The New Zealand dollar to Japanese yen currency pair (NZD/JPY) saw an uptrend on the daily chart from March 2020 to July 2024, gaining 66.58% over the four-year period. Recently, however, the pair broke below the 200-day Simple Moving Average (SMA) on the daily chart, signaling a potential trend reversal. The 200-day SMA, which had served as support for four years, now appears to be acting as resistance. Additionally, the NZD/JPY formed a double top, indicating that buyers were once more unable to push the price above the 92.00 mark. This double top region coincides with the 50% level of the bearish Fibonacci. Upward trend in NZDJPY driven by RBNZ-BOJ interest rate differential The strong upward trend had been driven by the interest rate differential between the New Zealand dollar and the Japanese yen. New Zealand, like many countries around the world, slashed interest rates during the COVID-19 pandemic to stimulate its economy. However, as the economy began to recover, the Reserve Bank of New Zealand (RBNZ) moved to raise rates to control inflation and avoid rampant price increases. With inflation now under control, the RBNZ has started cutting rates, with yesterday marking the third consecutive cut, as the central bank reduced New Zealand’s key interest rate from 5.25% to 4.75%. Japan, on the other hand, followed the opposite path, keeping its interest rate below 0 while other countries raised borrowing costs to control inflation — which is why the JPY has depreciated so much in recent years. However, in its most recent meetings, the Bank of Japan (BOJ) — Japan’s central bank — changed its stance and raised interest rates for the first time since 2016. With New Zealand’s interest rate declining and Japan’s interest rate increasing, there is potential for a medium-term devaluation of the NZD against the JPY. Downward movement in NZDJPY possible in coming months From a technical perspective, the following factors are at play: 1. Break of the uptrend on D1. 2. The 200-day SMA, which previously acted as support, is now serving as resistance. 3. A double top has formed on the daily chart. 4. The 50% Fibonacci region is bearish. Considering these technical factors and the diverging monetary policies of the central banks in Japan and New Zealand, a downward movement in NZD/JPY is possible in the coming months. If the price manages to break below 89.75, it is possible that it will fall to the 86.70 region in a few days. Disclaimer: 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
Short
by Marketscom
GOLD ROUTE MAP UPDATEHey Everyone, Another great day on the chart today with our analysis playing out once again. We got the Bullish target hit yesterday at 2655 and then no ema5 cross and lock above the level confirmed the rejection. Today we got our Bearish target at 2633 hit, which also gave us the weighted level bounce inline with our plans to buy dips safely for 30 to 40 pips. Followed with a break below 2633 completing the retracement range at 2611 in true level to level fashion. We will now look for support above here for e re-test at 2633 or a cross and lock below 2611 will open the swing range. We will keep the above in mind when taking buys from dips. Our updated levels and weighted levels will allow us to track the movement down and then catch bounces up. We will continue to buy dips using our support levels taking 30 to 40 pips. As stated before each of our level structures give 20 to 40 pip bounces, which is enough for a nice entry and exit. If you back test the levels we shared every week for the past 24 months, you can see how effectively they were used to trade with or against short/mid term swings and trends. BULLISH TARGET 2655 - DONE EMA5 CROSS AND LOCK ABOVE 2655 WILL OPEN THE FOLLOWING BULLISH TARGET 2674 BEARISH TARGETS 2633 - DONE EMA5 CROSS AND LOCK BELOW 2633 WILL OPEN THE RETRACEMENT RANGE RETRACEMENT RANGE 2611 - DONE EMA5 CROSS AND LOCK BELOW 2611 WILL OPEN THE SWING RANGE SWING RANGE 2586 - 2558 As always, we will keep you all updated with regular updates throughout the week and how we manage the active ideas and setups. Thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
6
Market News Report - 06 October 2024The last were turned this week for AUD, which went from being one of the top-performing currencies to among the worst. Conversely, the dollar gained the upper hand partly because of positive job numbers. Let's see how the coming weeks may turn out for the major currencies in our latest market news report. Market Overview Below is a brief technical and fundamental analysis breakdown for all major currencies. US dollar (USD) Short-term outlook: bearish. The Fed's recent historic 50 basis points (bps) rate cut keeps the bearish bias firmly in place. However, the stronger-than-expected jobs report put a spanner in the works, pricing out a 50 bps cut in the next meeting. However, the central bank has signalled the potential for two 25 bps drops by the end of this year. STIR (short-term interest rate) markets see a 97% chance of this cut in the meeting next month. After weeks of ranging around the key support area at 100.617, the DXY made its intention known to head north. We spoke about a potential technically-driven retracement (despite the bearish fundamentals). Meanwhile, the key resistance is far away at 107.348, which will remain untouched for some time. Long-term outlook: weak bearish. Markets anticipate several rate cuts before the year ends, with the Fed keen to harness a soft landing. Also, any data on weakened jobs would be another bearish driver for the dollar. However, the recent upbeat Non-Farm Payrolls figure makes rate cuts less urgent, allowing for potential further USD retracement. Euro (EUR) Short-term outlook: bearish. As usual, the STIR (short-term interest markets) were predictably accurate as the European Central Bank (ECB) cut the interest rate a few weeks ago. While 'being mum' about forward guidance, they revised core inflation projections higher. Also, the past week saw weaker economic data across various European nations. Finally, short-term interest rate (STIR) markets have indicated a 100% chance (up from 93% last week) of a rate cut at the October 17 meeting. The euro stayed around the 1.1200 area for over two months. However, it broke the range, showing the first of bearish pressure. Still, this market finds itself not far between the major resistance at 1.12757 and key support at 1.07774. Long-term outlook: bearish. After a long period, we have changed the long-term bias to 'bearish' (from 'weak bearish'). The ECB has yet to commit to a specific future path with the interest rate for some time. Due to lingering concerns over services inflation, a rate cut in October has become more likely than before. British pound (GBP) Short-term outlook: bearish. The Bank of England (BoE) kept the interest rate steady in its meeting. Still, the language indicates that they need to be “restrictive for sufficiently long.” Also, the central bank's higher-ups stressed "a gradual need" to cut rates. As with the ECB, the central bank's current key theme is fighting persistent inflation in the United Kingdom. So, it makes more sense to be dovish than hawkish. Governor Bailey even hinted last Thursday that "aggressive rate cuts" were possible if inflation went lower. This past week's downturn may be the start of a more serious bear move. Nonetheless, the next resistance target is 1.34825. Meanwhile, the nearest key support is at 1.26156. Long-term outlook: weak bearish. Sequential rate cuts by the BoE may soon be a reality. Also, expect any weak CPI, labour, and GDP data to back up the bearish bias. However, the central bank hopes for lower service inflation, which may provide relief. Another interesting point is the latest CFTC (Commodity Futures Trading Commission) report, showing that GBP longs have been stretched to the upside. So, bullishness should be limited at some point. Japanese yen (JPY) Short-term outlook: bullish. The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision to hike the interest rate. STIR markets expect a hold (99% probability) at the next meeting but a hike at the start of next year. ​​Governor Ueda of the BoJ noted that despite domestic economic recovery, recent exchange rate movements have reduced the upside risk of inflation. All of this backs up the potential for a rate hold or hike. The 140.252 support area is proving quite strong, boosting the yen since mid-September. Still, the major resistance (at 161.950) is too far for traders to worry about. Long-term outlook: weak bullish. Lower US Treasury yields are one potential bullish catalyst for the yen (the opposite is true). Inflation pressures and wage growth would also provide upward momentum. We should also consider that the dovish tendencies of other major central banks and worsening US macro conditions are JPY-positive Still, as a slight downer, near-term inflation risks subsiding (according to the BoJ) reduce the urgency for a rate hiking cycle. Australian dollar (AUD) Short-term outlook: weak bullish. The Reserve Bank of Australia (RBA) kept the interest rate unchanged during the Sept. 25 meeting. They further stated that they "did not explicitly consider rate hikes" for the future, which is a marginally dovish statement. The Aussie remains sensitive to China’s recent economic woes, especially with declining iron ore prices from the country’s steelmakers. As always, it depends on drops or rises in economic data like GDP, inflation, and labour. After failing to break the 0.68711 resistance level several times, the Aussie retraced noticeably from this area. Still, this market is bullish and far from the major support level at 0.63484. Long-term outlook: weak bullish. The RBA has certainly changed their tune from hawkish to slightly hawkish/dovish. Overall, it's crucial to be data-dependent with the Aussie, especially with core inflation as the RBA's key focus area. However, the Australian dollar is pro-cyclical, so it is exposed to economic growth in other countries. New Zealand dollar (NZD) Short-term outlook: weak bearish. In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.' The Reserve Bank of New Zealand (RBNZD) also revised cash rate projections lower, which further signals a dovish move. Finally, various core inflation metrics are consistent with stable and low inflation. The markets see a 100% chance (up from 70% last week) of a 0.5% rate cut at Tuesday's meeting. The major resistance level at 0.63696 is proving past strength as we see a noteworthy retracement (similar to its neighbouring Aussie). Conversely, the major support is at 0.58498, an area which it is unlikely to test soon. Long-term outlook: weak bearish. In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.' However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for NZD. So, traders should be data-dependent. Canadian dollar (CAD) Short-term outlook: bearish. The Bank of Canada (BoC) recently dropped the interest rate to 4.25%, as anticipated by the markets for some time. Further cuts in the next few meetings are on the cards (with a 63% chance of a 50 bps cut next month), with the long-term target being 3%. Unemployment, weak economic growth, and mortgage stress are the key drivers for this dovishness. Speaking of the former, keep an eye on the CAD unemployment rate on Friday (where no change is expected). The CAD continues to strengthen mildly due to USD weakness. It now looks to test the next major support target at 1.33586, while the major resistance is far ahead at 1.39468. Long-term outlook: weak bearish. Expectations of a rate cut remain the focal point. Governor Macklem himself stated a while ago that it's reasonable to expect more cuts in the future. Any big misses in the upcoming data for GBP, inflation, and GDP will probably boost the chance of a rate cut. STIR markets see a 63% chance of the latter happening later this month. Also, mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it. Expect encouraging oil prices and general economic data improvement to save the Canadian dollar's blushes. Swiss franc (CHF) Short-term outlook: bearish. STIR markets were, as usual, correct in their 43% chance of a 25bps rate cut (from 1.25% to 1%) this past week. In the Sept. 26 meeting, the Swiss National (SNB) indicated its preparedness to intervene in the FX market and further rate cuts in the coming quarters. The central bank's new Chair (Schlegel) said they "cannot rule out negative rates." Finally, the September CPI came in weak at 0.8%, against the expected year-on-year 1.1%. Still, the Swiss franc can strengthen during geopolitical tensions, such as a worsening Middle East crisis. While we see a clear range, this market is looking to break it (even though it remains a strong bear move). The major support level is closer at (0.83326), while the major resistance level is far higher at 0.92244. Long-term outlook: weak bearish. The bearish sentiment remains after the last SNB meeting, while inflation is being tamed with lower revisions. We should also remember that the SNB's intervention prevents the appreciation of the Swiss franc. The new chairman is more keen to cut rates than his predecessor, Jordan. STIR markets are currently pricing a 22% chance of a 50 bps cut at the meeting in December. On the flip side, 'safe haven flows' and geopolitical risks can be positively supportive for the currency. As with other central banks, inflation is a crucial metric in the SNB's policy rates. Conclusion Besides the NZD interest rate decision, this week isn't filled with high-impact economic events, reducing the chance of high volatility. Still, hope for the best and prepare for the worst. This report should help you determine your bias toward each currency in the short and long term.
TVC:DXY
by CityTradersImperium_CTI
GOLD ROUTE MAP UPDATEHey Everyone, Great start to the week with our chart idea playing out as analysed. We got the Bullish target hit at 2655 and then no ema5 cross and lock above the level confirming the rejection. You can see the ema5 turning just before the level to perfection confirming the rejection foe the move down. We are looking for support above 2633 to confirm rejection for another re-test above at 2655 or a cross and lock below 2633 will open the range below. We will see levels tested side by side until one of the weighted levels break and lock to confirm direction for the next range. We will keep the above in mind when taking buys from dips. Our updated levels and weighted levels will allow us to track the movement down and then catch bounces up. We will continue to buy dips using our support levels taking 30 to 40 pips. As stated before each of our level structures give 20 to 40 pip bounces, which is enough for a nice entry and exit. If you back test the levels we shared every week for the past 24 months, you can see how effectively they were used to trade with or against short/mid term swings and trends. BULLISH TARGET 2655 - DONE EMA5 CROSS AND LOCK ABOVE 2655 WILL OPEN THE FOLLOWING BULLISH TARGET 2674 BEARISH TARGETS 2633 EMA5 CROSS AND LOCK BELOW 2633 WILL OPEN THE RETRACEMENT RANGE RETRACEMENT RANGE 2611 EMA5 CROSS AND LOCK BELOW 2611 WILL OPEN THE SWING RANGE SWING RANGE 2586 - 2558 As always, we will keep you all updated with regular updates throughout the week and how we manage the active ideas and setups. Thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
9
GOLD 1H CHART ROUTE MAP & TRADING PLAN FOR THE WEEKHey Everyone, Please see our updated 1h chart levels and targets for the coming week. We are in a new rage but just like last time we were able to generate accurate levels to use for the coming week. We are seeing price between two weighted levels. We have 2674 Goldturn resistance and 2650, as Goldturn support. We currently have a gap above on market open at 2655 and below at 2633 and will need ema5 cross and lock on either weighted level to determine the next range. We will see levels tested side by side until one of the weighted levels break and lock to confirm direction for the next range. We will keep the above in mind when taking buys from dips. Our updated levels and weighted levels will allow us to track the movement down and then catch bounces up. We will continue to buy dips using our support levels taking 30 to 40 pips. As stated before each of our level structures give 20 to 40 pip bounces, which is enough for a nice entry and exit. If you back test the levels we shared every week for the past 24 months, you can see how effectively they were used to trade with or against short/mid term swings and trends. BULLISH TARGET 2655 EMA5 CROSS AND LOCK ABOVE 2655 WILL OPEN THE FOLLOWING BULLISH TARGET 2674 BEARISH TARGETS 2633 EMA5 CROSS AND LOCK BELOW 2633 WILL OPEN THE RETRACEMENT RANGE RETRACEMENT RANGE 2611 EMA5 CROSS AND LOCK BELOW 2611 WILL OPEN THE SWING RANGE SWING RANGE 2586 - 2558 As always, we will keep you all updated with regular updates throughout the week and how we manage the active ideas and setups. Thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
12
GOLD DAILY CHART SHORT/MID TERM ROUTE MAPHey Everyone, Please see update on our daily chart idea that we have been tracking for a while with the updated retracement and swing range. Same as last week we are still seeing price play between two weighted levels. We have 2690 Goldturn resistance and 2645, as Goldturn support. We currently have a gap above at 2690, as we had ema5 cross and lock above 2645 opening 2690. The daily chart averages are lagging so sometimes gaps get filled before ema5 confirmation, in which case candle body close gaps are suffice. Currently we have ema5 cross and lock leaving 2690 gap open and support at 2645 Goldturn for the bounces we are seeing. 2645 is currently providing support and bounces inline with our plans to buy dips and no cross and lock below 2645, therefore confirming support. Please note a break below 2645 will also open the lower range, which we can use to track the movement down and catch the bounces up. We will keep the above in mind when taking buys from dips. Our updated levels and weighted levels will allow us to track the movement down and then catch bounces up. Our long term bias is Bullish and therefore we will continue to use our smaller timeframes to buy dips using our levels and setups. Buying dips allows us to safely manage any swings rather then chasing the bull from the top. Thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
2
WEEKLY CHART MID/LONG TERM ROUTE MAPHey Everyone, Please see update on our weekly chart idea that we have been tracking and trading over the last two weeks. Last week we stated that we were seeing a breakout outside the new Goldturn channel (our unique way of drawing channels) and that we have a detachment to ema5 below also inline with the channel top for a possible re-test for a correction. - We got the correction but not the full attachment to ema5, but as you can see the channel top is providing the support we mentioned. As stated before if the channel top continues to provide support then we will track the movement up, confirmed with ema5 cross and lock or candle body close. We currently have a candle body close gap to 2729 long range AXIS TARGET. However, if we continue to see tests on the channel top and then get a break inside the channel, then we will track the movement down, inline with our plans to buy dips, using our smaller time-frames, keeping in mind the long range gap for the future.. Buying dips allows us to safely manage any swings, instead of chasing the bull from the top. Thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
3
GOLD ROUTE MAP UPDATEHey Everyone, A PIPTASTIC finish to the week with our chart idea doing another repeat of the move completing the 2669 target twice, allowing us to buy dips inline with our plans. 2669 Goldturn resistance and 2650 Goldturn support were both completed earlier this week, followed with drops into the retracement range but not the full retracement test. This still allowed us to buy dips, as 2650 also gave the bounces for another re-test to our Bullish target 2669 completing the week. The market moved sideways this week but allowed us to safely between the range buying dips. BULLISH TARGET 2669 - DONE BEARISH TARGETS 2650 - DONE Our long term bias is Bullish and therefore we will continue to use our smaller timeframes to buy dips using our levels and setups. Buying dips allows us to safely manage any swings rather then chasing the bull from the top. We will now come back Sunday with our updated Multi time-frame analysis, Gold route map and trading plans for the week ahead. Have a smashing weekend!! And once again, thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
13
GOLD 4H CHART ROUTE MAP UPDATEHey Everyone, Another great day on the chart today with our 4H chart playing out, as analysed. We had price play between two weighted levels. 2669 Goldturn resistance and 2650, as Goldturn support and both highlighted, as targets. - Both targets have been completed. We were able to take advantage of the drop and buy inline with our plans to buy dips and complete the bullish target. We need to also keep in mind the retracement range was not fully completed and a gap left open. We are seeing price test 2650 for support and if this holds; we are likely to see another 2669 test. However, we will need to see ema5 lock above 2669 or we are likely to see another drop to complete the full retracement range. We will keep the above in mind when taking buys from dips. Our updated levels and weighted levels will allow us to track the movement down and then catch bounces up. We will continue to buy dips using our support levels taking 30 to 40 pips. As stated before each of our level structures give 20 to 40 pip bounces, which is enough for a nice entry and exit. If you back test the levels we shared every week for the past 24 months, you can see how effectively they were used to trade with or against short/mid term swings and trends. BULLISH TARGET 2669 - DONE EMA5 CROSS AND LOCK ABOVE 2669 WILL OPEN THE FOLLOWING BULLISH TARGET 2695 EMA5 CROSS AND LOCK ABOVE 2695 WILL OPEN THE FOLLOWING BULLISH TARGET 2717 POTENTIALLY 2738 BEARISH TARGETS 2650 - DONE EMA5 CROSS AND LOCK BELOW 2650 WILL OPEN THE RETRACEMENT RANGE RETRACEMENT RANGE 2615 EMA5 CROSS AND LOCK BELOW 2615 WILL OPEN THE SWING RANGE SWING RANGE 2582 - 2556 As always, we will keep you all updated with regular updates throughout the week and how we manage the active ideas and setups. Thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
10
WEEKLY CHART MID/LONG TERM ROUTE MAPHey Everyone, I wanted to start the week with an update on our weekly chart idea shared yesterday. We stated and highlighted the detachment below for the correction and we also advised that we were looking for are-test on the channel top. We are looking for support above the channel top for a bounce and continuation. However, as stated yesterday; If we get a break inside the channel then we will track the movement with the levels highlighted within the channel and our smaller timeframe chart ideas to track the movement down and catch the bounces up. If the channel top provides support then we will track the movement up confirmed with ema5 cross and lock or candle body close. We currently have a candle body close gap to 2729 long range AXIS TARGET. The overall structure still remains Bullish, we just need to manage swings inline with corrections, which are always likely after a strong bull run.. Thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
2
Market News Report - 29 September 2024Due to an unsurprising rate hold, the Aussie was among the top-performing currencies in the major forex markets. Meanwhile, the dollar fell against AUD and several other currencies as the recent Fed cut continues to downplay the greenback. Have any fundamental outlooks changed for this week compared to our last report? Let's find out. Market Overview Below is a brief technical and fundamental analysis breakdown for all major currencies. US dollar (USD) Short-term outlook: bearish. Unsurprisingly, the Fed's recent historic 50 basis points (bps) rate cut is still a hot topic, keeping the bearish bias firmly in place. The central bank has signalled the potential for two 25 bps drops by the end of this year. In line with this sentiment, the Fed also revised 'dots' lower, Gross Domestic Product (GDP) and unemployment higher. Negative expected jobs and ISM services data coming this week will add further to the bearish pressure. Despite these fundamentals, the DXY has yet to break the support area at 100.617, instead ranging around this level for quite a while now. So, be mindful of a potential technically-driven retracement. Meanwhile, the key resistance is far away at 107.348, which will remain untouched for some time. Long-term outlook: weak bearish. Markets anticipate rate cuts before the year ends, with the Fed keen to harness a soft landing. Also, any data on weakened jobs would be another bearish driver for the dollar. However, any potential strength in upcoming GDP (Gross Domestic Product) and jobs would make rate cuts less urgent, allowing for a USD retracement. Euro (EUR) Short-term outlook: weak bearish. As usual, the STIR (short-term interest markets) were predictably accurate as the European Central Bank (ECB) cut the interest rate a few weeks ago. While 'being mum' about forward guidance, they revised core inflation projections higher. Also, the past week saw weaker economic data across various European nations. Finally, short-term interest rate (STIR) markets have indicated a 93% chance of a rate cut in October. Meanwhile, the chart tells a slightly different story. After recently breaking a major resistance, the next target is 1.12757. Meanwhile, the key support area lies far below at 1.07774. Long-term outlook: bearish. After a long period, we have changed the long-term bias to 'bearish' (from 'weak bearish'). The ECB has yet to commit to a specific future path with the interest rate for some time. Due to lingering concerns over services inflation, a rate cut in October has become more likely than before. There is a 7% chance (down from 67% of a hold (according to STIR markets). All of this accents the bearish bias. British pound (GBP) Short-term outlook: bearish. The Bank of England (BoE) kept the interest rate steady in its meeting. Still, the language indicates that they need to be “restrictive for sufficiently long.” Early last week, the central bank's higher-ups stressed "a gradual need" to cut rates. As with the ECB, the central bank's current key theme is fighting persistent inflation in the United Kingdom. So, it makes more sense to be dovish than hawkish. Expect any shocks in inflation (or other data like labour) to send the pound lower. Like the euro, the British pound has been saved by dollar weakness on the charts. However, it is more bullish. We must go onto the weekly chart to see the next resistance target at (1.34825). On the other hand, the nearest key support is far away at 1.26156. Long-term outlook: weak bearish. Sequential rate cuts by the BoE may soon be a reality. Also, expect any weak CPI, labour, and GDP data to back up the bearish bias. However, the central bank hopes for lower service inflation, which may provide relief. Another interesting point is the latest CFTC (Commodity Futures Trading Commission) report, showing that GBP longs have been stretched to the upside. So, bullishness should be limited at some point. Japanese yen (JPY) Short-term outlook: bullish. The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision to hike the interest rate. STIR markets expect a hold (99% probability) at the next meeting but a hike at the start of next year. ​​Governor Ueda of the BoJ noted that despite domestic economic recovery, recent exchange rate movements have reduced the upside risk of inflation. All of this backs up the potential for a rate hold or hike. USD/JPY has long been bearish, recently surpassing (but not breaking with confidence) the major resistance at 140.252. Meanwhile, the major resistance (at 161.950) is too far for traders to worry about. Long-term outlook: weak bullish. Lower US Treasury yields are one potential bullish catalyst for the yen (the opposite is true). Inflation pressures and wage growth would also provide upward momentum. We should also consider that the dovish tendencies of other major central banks and worsening US macro conditions are JPY-positive Still, as a slight downer, near-term inflation risks subsiding (according to the BoJ) reduce the urgency for a rate hiking cycle. Australian dollar (AUD) Short-term outlook: weak bullish. The Reserve Bank of Australia (RBA) kept the interest rate unchanged during the Sept. 24 meeting. They further stated that they "did not explicitly consider rate hikes" for the future, which is a marginally dovish statement. The Aussie remains sensitive to China’s recent economic woes, especially with declining iron ore prices from the country’s steelmakers. As always, it depends on drops or rises in economic data like GDP, inflation and labour. The Aussie market has risen noticeably of late, having exceeded the recent resistance level at 0.68711. However, as it has yet to break the level confidently, we need to see how it behaves near the latter. Meanwhile, the major support level is down at 0.63484. Long-term outlook: weak bullish. The RBA has certainly changed their tune from hawkish to slightly hawkish/dovish. Overall, it's crucial to be data-dependent with the Aussie, especially with core inflation as the RBA's key focus area. However, the Australian dollar is pro-cyclical, so it is exposed to economic growth in other countries. New Zealand dollar (NZD) Short-term outlook: weak bearish. In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.' Furthermore, the Reserve Bank of New Zealand (RBNZD) also revised cash rate projections lower, which signals a dovish move. The markets see a 70% chance of an 0.5% rate cut next month. The Kiwi has recently breached a major resistance at 0.62220. While the next target is at 0.63696 (where it is very close to hitting), the latter area is still worth considering. Conversely, the major support is at 0.58498, an area which it is unlikely to test soon. Long-term outlook: weak bearish. In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.' However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for NZD. So, traders should be data-dependent. Canadian dollar (CAD) Short-term outlook: bearish. The Bank of Canada (BoC) recently dropped the interest rate to 4.25%, as anticipated by the markets for some time. Further cuts in the next few meetings are on the cards (with a 57% chance of a 50bps cut next month), with the long-term target being 3%. Unemployment, weak economic growth, and mortgage stress are the key drivers for this dovishness. The CAD continues to strengthen mildly due to USD weakness. It now looks to test the next major support target at 1.33586, while the major resistance is far ahead at 1.39468. Long-term outlook: weak bearish. Expectations of a rate cut remain the focal point. Governor Macklem himself stated a while ago that it's reasonable to expect more cuts in the future. Any big misses in the upcoming data for GBP, inflation, and GDP will probably boost the chance of a rate cut next month. Also, mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it. Expect encouraging oil prices, along with general economic data improvement, to save the Canadian dollar's blushes. Swiss franc (CHF) Short-term outlook: bearish. STIR markets were, as usual, correct in their 43% chance of a 25bps rate cut (from 1.25% to 1%) this past week. In the Sept. 26 meeting, the Swiss National (SNB) indicated its preparedness to intervene in the FX market and further rate cuts in the coming quarters. Still, the Swiss franc can strengthen during geopolitical tensions, such as a worsening Middle East crisis. We are seeing a clear range on USD/CHF in a strong bear move. So, let's see which side the market is going to incline more towards going forward (although it looks more south than north). The major support level is closer at (0.83326), while the major resistance level is far higher at 0.92244. Long-term outlook: weak bearish. The bearish sentiment remains after the last SNB meeting, while inflation is being tamed with lower revisions. We should also remember that the SNB's intervention prevents the appreciation of the Swiss franc. On the flip side, 'safe haven flows' and geopolitical risks can be positively supportive for the currency. As with other central banks, inflation is a crucial metric in the SNB's policy rates. Conclusion We have kept our fundamental outlooks the same, except for the long-term outlook on the euro. Anyone trading the latter in the coming weeks should bear this in mind. Besides the US-related news, this week isn't filled with high-impact economic events, meaning less volatility. Still, hope for the best and prepare for the worst. This report should help you determine your bias toward each currency in the short and long term.
TVC:DXY
by CityTradersImperium_CTI